GBP/USD ended last week at 1.2540, down 85 pips as USD strength dominated. This week brings two major risk events that could define the pair's direction for June.
Key Events This Week
| Day | Event | Impact |
|---|---|---|
| Tuesday | UK CPI (May) | High |
| Thursday | BoE Rate Decision | Very High |
| Friday | US Non-Farm Payrolls | Very High |
| Friday | US Unemployment Rate | High |
Technical Outlook
The pair is trading below the 50-day and 200-day moving averages, confirming the bearish trend. Key levels:
- Resistance: 1.2600 (50-DMA), 1.2680 (trendline)
- Support: 1.2500 (psychological), 1.2450 (March low)
Scenario Analysis
Bullish Case (target 1.2680)
BoE holds rates but hawkish statement + weak US jobs → USD selling, cable rally to 1.2680.
Bearish Case (target 1.2400)
BoE cuts rates or dovish hold + strong NFP → double whammy sends cable to 1.2400.
Base Case
We lean slightly bearish. The BoE is likely to hold but with a dovish tilt, while US data remains resilient. Target: 1.2450 by week-end.
Trade idea: Sell rallies to 1.2580-1.2600 with stops above 1.2650 and targets at 1.2450.